For the second straight day, crude oil prices dropped precipitously.

Crude oil closed 2006 at $61.05 a barrel. It’s now at $55.59 a barrel. That’s a 9 percent drop in 2 trading days. I was just out shopping & gas was $2.189 a gallon, which it’s been holding at for awhile now. I suspect that the Twin Cities, which is cheaper than St. Cloud, will be selling for under $2 a gallon by this time tomorrow.

What I find interesting is that the calls for investigations into “excessive oil prices” and price gouging have disappeared now that prices have dropped. What’s caused this drop in prices? Here’s what the article says:

An unseasonably mild winter in the Northeast and Midwest has led to a buildup in inventories and, as a result, weaker prices. “There is no winter at all, thus we have a lot of supplies with no home and prices have nothing to do but fall,” said James Cordier, president of Liberty Trading Group in Tampa, Florida.

In other words, the markets have acted as markets always have and always will. Increased supplies translate into lower demands with translates into cheaper prices on commodities.

It’s worth noting that Democrats screaming last fall for investigations into price gouging are silent now. their calls for investigations didn’t cause a ripple in the price of oil. A kinder, gentler Mother Nature, mixed with a change in people’s consumption and conservation habits and the markets are responsible for that. For all their bluster, Democrats’ yapping meant nothing to the drop.

Technorati Tags: Markets, Energy, Price Gouging, Conservation